Supply fears lead EU vaccine industry to seek home comforts By Reuters
By Ludwig Burger and Patricia Weiss
FRANKFURT (Reuters) – European companies playing key supporting roles in COVID-19 vaccine manufacturing are working to move production and supply chains closer to their customers to guard against trade restrictions that have interrupted supplies during the pandemic.
Merck KGaA of Germany is one of the largest producers of bioreactor supplies and gear in the world. It told Reuters that it plans to increase its geographical distribution to reduce cross-border shipping.
Merck’s struggle to keep up with the rising demand for supplies, such as filters and sterile fermentation bags, has been made more difficult by U.S. laws.
However, the United States may not be the only country engaged in “vaccine nationalism”. India stopped exporting vaccines mid-April in order to concentrate on domestic vaccination drives. This was after infections rose across India, causing a disruption in the plans for many South Asian and African countries.
AstraZeneca (NASDAQ) production issues earlier this year led to the European Union creating an export monitoring program and accusing Britain of withholding COVID-19 vaccine quantities that should be distributed with the EU.
Belen Garijo, chief executive of the European Union said that “every forward-looking and thoughtful decision” he made included the geopolitical dimension. She added that “In light of trade restrictions, we have increased our global diversification whenever we could.”
Rentschler Biopharma SE is a German contract producer for large pharma companies. It’s helping CureVac produce the COVID-19 vaccine candidate. The pandemic forced Rentschler Biopharma SE to review its procurement processes.
We needed to make our supply chains more localized after the coronavirus crises. Frank Mathias (CEO), stated that most of the equipment was to be sourced in Europe, so we don’t have as much dependence on America. He cited bioreactors sterile bags as one example. Mathias did not identify his suppliers.
Mathias stated that supply chains were shattered earlier in the year after certain quantities of vaccines were commandeered by the United States.
Merck couldn’t serve other vaccine producers around the globe because of U.S. Defense Production Act and its rating system that gives priority to U.S. emergency response.
Merck announced plans in March to invest 25 millions euros in France for disposable plastic materials, which are essential for COVID-19 vaccine production.
Merck is expected to open the European facility at the beginning of 2021. This will add production lines from the U.S. as well as China.
Following its December investment of $47million in U.S. facilities located in Massachusetts, New Hampshire and Connecticut, Merck was said to be increasing its global output in order to satisfy unprecedented demand.
Garijo of Merck stated that “the pandemic is a wakeup cry.” You need to establish a worldwide presence to manage trade issues.
Merck, a family-controlled company, also produces prescription drugs and chemicals used in semiconductor production. However, its Life Science unit has been its primary earnings driver. It consists mainly of businesses that were once known as Millipore or Sigma Aldrich.
Thermo Fisher, Danaher (NYSE 🙂 and Sartorius are its main competitors.
The German IDT Biologika, a family-owned vaccine producer, announced earlier in the year plans to spend more than 100 millions euros on AstraZeneca’s COVID-19 vaccination. It also aims to minimize long transportation routes and avoid any international problems.
AstraZeneca’s vaccines and other vaccines from the same virus vector class would all be produced on the production line. It is expected to start operating in 2023.
IDT would manufacture the active ingredient, mix the product and package it. This combined a number of steps currently scattered across the globe.
IDT confirmed that the project was moving along but did not comment. According to the company, the German federal health ministry assisted with the project. However, the funding was not provided.
Merck CEO Garijo cautioned that retooling production networks within a sector of pharma that relies on international exchange and division of labor can only be accomplished in small steps.
It is impossible to move factories from one day into the next, it takes time,” she stated.